Ocean Power: Undercapitalized Minnows (Ocean Power, Carnegie Clean Energy) And Big Fish (Enel)

Sep. 12, 2022 1:21 PM ETEnel SpA (ENLAY), ESOCFCWGYF, HPE, IHICF, IHICY, LMT, OPTT, SMAYF, TSLA36 Comments
Keith Williams profile picture
Keith Williams


  • Recent NREL report indicates massive capacity for ocean power.
  • Challenges for the small wave/tidal companies due to lack of funds. Ocean Power Technologies (OPTT) becomes a consulting company.
  • Carnegie Clean Energy (CWGYF) stops scale up of production and focuses on building its IP portfolio.
  • Europe and US build government-funded test facilities as a step towards commercialization.
  • The small companies are the innovators, but deep pockets needed for the next step; ENEL (ENLAY) watches and waits.
Abstract background. Digital technology connection concept.

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Sometimes innovation takes forever before it finally takes off. Coming from the biotech industry, I’ve spent decades learning about emerging technologies and how to spot the time when a transition from “good idea” to commercial success happens. This is the key to one way to produce investment outcomes with returns that one mostly dreams of. Along the way, the emerging company needs to survive and not wipe out early investors with successive capital raisings that disadvantage them. Readers familiar with my investing interests will be aware that I’m strongly focused on the electrification of everything as the world begins to exit fossil fuels. Solar PV and wind power are now the cheapest sources of energy and they're being implemented at scale, but their intermittency needs to be managed with storage (eg batteries, gravity storage, pumped hydro etc). Some applications that involve small operations currently using diesel, notably marine operations and island operations, are problematic. There's a lot of noise about 24/7 power sources that don’t involve fossil fuels, and nuclear power is one such possibility. I plan to update on nuclear elsewhere. Is there another major 24/7 clean power source out there?

Here I consider ocean power, the big opportunity hiding in plain sight. The potential is staggering but capture solutions remain elusive. The big early returns for investors will come from the small innovator companies, but they don’t have deep pockets to pull the technology through to scale up. I make some comments about the current field of minnows and also whether any large energy companies are engaged yet. My timing is out on this one as my investment in an early player, Carnegie Clean Energy (OTCPK:CWGYF) (ASX:CCE), was way too early, but it may end up paying off.

Is wave energy emerging from the shadows?

For a long time it has been appreciated that waves have a lot going for them as a reliable renewable energy source. Moving water carries a lot of energy. Estimates about coastal US suggests that more than 50% of US power needs could be captured in coastal waves. The trick has been how to capture it reliably and without damaging the capture apparatus.

There have been some brave starts in the early days of wave technology development, perhaps the wildest being GWave, a US company that decided to dispense with developing small scale prototypes and instead built a 13,000 ton monster aimed at delivering 9 MW power capacity. In 2017 I contrasted the GWave approach with Australian wave industry veteran Carnegie Clean Energy (OTCPK:CWGYF) which painstakingly built and trialed various evolutions of a small device, CETO, which it tested in real world conditions. About six months later GWave imploded in controversy after spending 42 million pounds sterling of grant funding on the device. It was argued that the GWave project set back wave developments because of its spectacular failure. Meanwhile five years on and Carnegie is still alive and continues to get closer to commercial delivery of the CETO device, which is based on farms of this relatively small device.

Governments are getting more serious

Moving water is powerful and this power is often underestimated by wave/ocean/tidal companies. You can build a capture device that works admirably in a controlled tank simulator, but out in the real world things usually go awry. Europe has been clear about the need for real world test facilities for a long time, while the US is a recent participant at the government level for providing real world test facilities.


Europe has led the development of ocean-based energy programs for a number of years, doing the hard yards that were done for solar PV in Germany (before China picked up the solar PV technology and drove it to become the world’s cheapest renewable energy source that is being rapidly adopted everywhere). It's too early to know which ocean technology is going to dominate, but it's worth watching companies who have funding by various bodies to bring to commercial readiness various technologies.

The European Marine Energy Centre (EMEC), based on the Scottish island of Orkney, was founded in 2003 and was the world’s first wave and tidal test facility. EMEC supports other testing facilities in Asia, France, the Netherlands and Spain. It's a reference center for development of international standards and a place for technology innovation.

A second major European ocean test facility is BiMEP (Biscay Marine Energy Platform) for validating wave energy collectors, floating wind platforms and oscillation water column technology.


Last year FERC (Federal Energy Regulatory Commission) issued a licence to Oregon State University to build two wave energy testing sites called PacWave a few miles offshore from Newport, Oregon. Four subsea cables have been installed from PacWave South and the coast. PacWave is an $80 million Department of Energy (DOE) funded grid-connected, full scale wave testing facility that has been under development since December 2016 after a competitive funding process. It will eventually be able to accommodate up to 20 wave energy converters. Other DOE energy portfolio projects include tidal and current energy converters, as well as ocean thermal energy converters.

To some extent it seems likely that PacWave is a US decision to get up to speed with ocean technology that has been most studied through European Government support. The list of PacWave partners makes interesting reading to get a sense of leading technology providers to the emerging ocean power sector.

This facility is now beginning to host companies looking to test devices in a real ocean environment. Oakland California-based CalWave Power Technologies looks like the kind of company worth watching. Last year it completed a six-month pilot test of its xWave technology of the coast of San Diego. The next step is a commercial scale pilot at the PacWave facility.

Which companies are interested in wave power?

While there are examples of large companies incubating new technologies, today it's mostly the case that technology innovation happens in emerging companies that either grow to become market leaders (eg Tesla (TSLA) in the electrification of transport) or they get acquired by a better financed company to do the hard yards of commercializing technology that looks viable but needs deep pockets to prove it.

Wave power is still early but there are companies interested because it potentially provides clean 24/7 power at scale.

Those mentioned in market reports are minnows and mostly privately owned. Ten companies are mentioned in a 2020 report covering the period until 2025. There's only one US company (Ocean Power Technologies), three Australian companies (Carnegie Clean Energy (ASX:CCE), AMOG Consulting and Wave Swell Energy), two German companies (SINN Power, NEMOS) and one company from each of Israel (Eco Wave Power), Ireland (OceanEnergy), UK (AWS Ocean Energy) and Sweden (CorPower Ocean).

Another view of wave energy startups includes most of the above but in addition Finnish company AW-Energy, Czech company Octoteq, Spanish company Arrecife Energy Systems and US company AquaHarmonics.

And there's a deeper dive revealing 144 Wave Energy Converter companies!

Virtually all of the above companies remain in startup mode. Only Ocean Power Technologies traded on the Nasdaq (OPTT) and ASX-listed Carnegie Clean Energy (ASX:CCE) are publicly traded. Carnegie also trades on the OTC Pink Sheets (OTCPK:CWGYF) but with virtually no volume.

Ocean Power Technologies

Ocean Power occupies a different space to the other companies in this report as it's not really a significant player in the power generation space. Its power technology is to support remote communications and other low power requirements. The company has struggled in recent years (like almost all of the startups) and it now seeks to be largely a consulting company. The Q4 2022 (year end April 30 2022) earnings call covered three areas: i) data as a service which involves leading offshore data collection, integration and analysis; customers include Universities, Governments and research facilities; ii) power as a service which delivers power platforms for buoys, subsea batteries etc often for short duration projects; iii) strategic consulting services which involves offshore energy-related engineering consulting services to increase operational efficiency and reduce risk. Revenues for the three areas comprised $1.76 million in 2022. The goal is for $9 million revenue in 2023 with much of it involving data as a service to the offshore wind industry.

Carnegie Clean Energy

Carnegie is a survivor of the early days of wave power and this gives it a deep reservoir of information about the technology it has been developing for more than a decade. For a long time its goal was to get its technology to commercial success, but the costs involved with the final stages of commercialization beat them (as did a foray into land-based big batteries at the beginning of this technology). They survived by focusing on achievable goals to get their technology ready for a big partner through a recently-completed digital development pathway which focused on reducing costs and increasing efficiency of their CETO device. They have a small strategic partnership with Hewlett Packard (HPE) on their Reinforcement Learning Based Controller.

Intriguing in 2018 was a collaboration agreement with ENEL Green Power in research, development and deployment funding of 1 million pounds concerning the Carnegie CETO technology. I can find no update on this interest by ENEL. It came at a time shortly before Carnegie realized that it would not be able to go it alone with the full CETO development. Perhaps with the EuropeWave PCP project development (see below), ENEL might reappear as an interested party in the CETO technology?

Carnegie (through its Irish subsidiary CETO Wave Energy Ireland Ltd) is one of seven Phase 1 finalists for the 20 million pound EuropeWave PCP project awards. Carnegie’s ACHIEVE Project represents a lot of new refinements of its CETO technology, capturing almost twice the energy that earlier versions delivered, while retaining the core submerged operation that is protective against breaking waves and storms. Phase 1 funding involves 291,000 pounds for Carnegie, with a further 600,000 pounds for Phase 2 and 3.75 million pounds if the company is successful in winning Phase 2 and 3 funding. The goal of the funding is to support wave energy converter systems to a point where they can be successful for commercial exploitation. Three of the successful Phase 1 contractors will be able to deploy their systems at facilities at BiMEP or EMEC in Phase 3.

In the process of building out their digital development pathway Carnegie has been looking for earlier commercial outcomes for their technology. One such project funded significantly by the Australian Government Blue Economy CRC is the $A3.4 million MoorPower Scaled Demonstrator project. This project is a CETO technology spinoff that plans to power moored offshore vessels (eg barges in the aquaculture sector) through wave power (rather than diesel). Carnegie suspects that, if successful, this technology might have wide application in many offshore applications. Carnegie’s cash input is just $A265K, while CRC support is $A1.35 million cash but there's $A1.8 million in kind support including from Australia’s two largest aquaculture companies.

Carnegie is only just alive with a share price that barely registers, but it's solvent ($US˜20.67 million market cap). I’ve stuck with the company and as a result of participating in various stock offerings, I’m surprisingly close to breaking even at the current depressed share price. If they cut a deal, this could yet be one of my outperforming portfolio stocks, but it's a risky investment that few investors probably have an appetite for.

Big players interested in ocean power

As I’ve indicated above, it's easy to get interested in ocean power because it has potential to make a major clean energy contribution, and it provides close to 24/7 power. As also indicated above, the devil is in the detail and in particular deciding which technologies will become successful. Investors seeking assurance that there will be a future for ocean investment might be encouraged by the oft repeated statement that ocean power is merely a few decades behind the emergence of the wind industry (or a few years behind the offshore wind industry). Interestingly there are some efforts to combine offshore wind and wave technology on the same platform. Norwegian company Pelagic Power is pioneering hybrid wind and wave platforms. However, just as with many emerging technologies, the path to commercial success is not straight and the latest technology W2Power platform seems to have focus more on an innovative floating wind platform and it isn’t clear whether to hybrid wind/wave platform is currently the main focus of the company. UK-based Marine Power Systems is developing similar floating wind/wave power combinations with its Pelaflex and PelaGen technologies.

To really make ocean power work, substantial companies with deep pockets need to become part of the solution.

There are a few examples of big companies “testing the water” but so far with little success.


This large Italian power company has shown a commitment to ocean power technology through Enel Green Power, which has a significant footprint in many solar PV and wind projects (1,200 power plants (7.94GW solar, 16.91 GW wind, 28.38 GW hydro) on five continents, with biggest strength in Europe and Central and South America). This company even has a section on its website which addresses the issues. Enel is standing back waiting to see which technology has the best prospects. Enel has engaged with Carnegie in a small way, but it seems to be in “wait-and-see” mode.

The section on the ENEL website which overviews wave energy and its potential mentions three different wave energy capture mechanisms : i) wave activated body, where wave motion (mechanical energy) is used to generate electricity via turbines or electrical converters; ii) overtopping, where energy from water hits a barrier and passes through a hydraulic turbine and iii) oscillating water column, where a water column compresses an air mass which activates a turbogenerator.

Many wave generator systems fit into the turbine class mentioned by ENEL. My skepticism about turbines in the sea comes from observing the power of an ocean storm (eg releasing massive amounts of kelp) that's very destructive. I lived for a long time on the East Australian coast and saw many times first hand the destructive power of the sea when angry. Devices like Carnegie’s CETO technology and CalWave’s xWave, which operate below the surface and don’t have a propeller to tangle, seem more promising and Carnegie has more than a decade of real world CETO device development in ocean environments.

ENEL concludes that it isn’t yet clear which technology approach will have widespread adoption. They are probably looking closely at the companies participating in the EuropeWave PCP projects.

Lockheed Martin (LMT)

Lockheed Martin has a small section on its website on tidal energy concerning the MeyGen project in Scotland. Lockheed Martin is named as the technology provider with their AR1500 turbine. There's considerable information available on other websites (not Lockheed Martin) about the project.

MeyGen is claimed to be the largest tidal project in the world (4 x 1.5 MW turbines = 6 MW capacity, but just two are working currently). SIMEC Atlantis Energy (OTCPK:SMAYF) is the developer and it's recently reported to be preparing to expand the site with an additional capacity of 28 MW of turbines with financial close projected for 2024 and to be operational by 2027. SIMEC talks about delivering 400 MW tidal power at MeyGen. This seems a long way off. SIMEC’s market capitalisation is reported by Seeking Alpha to be $16.74 million.

In 2014 Lockheed Martin teamed up with Australian start-up Wave Power Technologies to build a scaled up wave energy system of 62.5 MWh. I have not been able to find follow-up on this project.

Lockheed Martin is a big company but there doesn’t seem to be traction on the tidal/wave area at this time.

IHI Corporation (OTCPK:IHICF)

IHI Corp is a $4 billion Japanese company that operates in resources, energy and environment. The company has an ocean current turbine, which is exploring ocean current power generation, which is particularly favorable offshore of Japan.

As happens with much early ocean power developments the size is small (100kW scale), but the next step is 2MW (2 x 1MW units). The 100kW scale device is big with a 280 ton anchor! I’m not holding my breath about the success of this approach, but the company can afford the development costs. It won’t be ready until the 2030s.

The claim is that the IHI technology could supply 200GW of energy (60% of Japan’s power capacity), but as usual for this kind of development scale up is far off (2030).


A recent NREL (National Renewable Energy Lab) report provides current data on the utility-scale potential for US marine energy resources; it's detailed covering state, regional and national information. The resource potential remains largely unexploited, but it's huge, encompassing national coastlines and rivers. The report focuses on the Technical resources that can actually be harnessed for energy generation. Interestingly this report does not include Blue Economy applications for marine energy, which include offshore industries, science and security, which require less energy intense generation, as well as energy and water needs of coastal communities. So this report focuses squarely on big power needs. Note that Carnegie Clean Energy also is developing new products for the micro-power applications which the NREL report acknowledges can be valuable. The NREL report concludes that the total utility-scale marine technical resource involves 2,300 TWh annually or 57% of electricity generation in the US in 2019. If US Pacific and Caribbean territories are included an additional 4,100 TWh of ocean energy resource is available. Note that estimated capacity factors for wave and tidal power are assumed to be 30%, while ocean current devices are assumed to have a capacity factor of 70%. The report doesn’t attempt to forecast future deployment, but it makes clear that even a small percentage of the available resources would significantly impact US energy needs. Accessing 10% of the energy available would contribute between 40 and 90 GW of marine power capacity (and 5.7% of national energy generation). Wave energy is especially powerful along the US West Coast, while tidal energy has major potential in Alaska. Ocean current energy is primarily associated with the Gulf Stream and hence impacts North Carolina, South Carolina Georgia and Florida. Ocean thermal energy is available in parts of the Atlantic coast. Rivers across the country are available without need for dams or river diversion.

There's a lot of discussion about nuclear power (which I shall update soon) but the potential of marine energy is essentially overlooked in discussion about future renewable energy exploitation. I’ve shown here that wave/tidal technology is immature, but now becoming close to being available for commercial exploitation. This area is one where I invested very early, but luckily I chose one of the companies (Carnegie Clean Energy) that have survived and might yet blossom. Smarter investors than me might keep an eye out for investment possibilities as they approach the stage where the market will recognize the opportunity and provide the possibility of investment outperformance. I remain optimistic about Carnegie, but it sits in my bottom drawer awaiting a partnership deal which will drive rapid commercialization. ENEL seems like a company that might become a key decision-maker about which emerging company(ies) might end up rewarding investors. The flagship Nasdaq-listed Ocean Power Technologies seems to be struggling to survive and reverting to a consulting role doesn’t augur well from my perspective. Probably the best option for investors is to keep an eye out on companies succeeding in European and US national test facilities and see which companies with deep pockets get involved.

I'm not a financial advisor but I follow closely emerging renewable energy technologies, with wave power the sleeper at this stage. I hope that my perspective is of interest to you and your financial advisor as you consider your energy investments as we enter into the end of high emissions technologies (fossil fuel exploitation) and engage with a new generation of companies.

This article was written by

Keith Williams profile picture
Keith began his career as a research scientist (developmental biology, biochemistry, molecular biology) at the Australian National University, University of Oxford (UK), the Max Planck Institute for Biochemistry (Munich, Germany) and finally Macquarie University (Sydney) where he held a Chair in Biology and established the Centre for Analytical Biotechnology. Pioneering the area of proteomics (with Marc Wilkins in his group coining the term), Keith established the world’s first government-funded Major National Proteomics Facility (Australian Proteome Analysis Facility) which was involved with industrialising protein science. Keith left academe with his team to found Proteome Systems Ltd in 1999 to commercialise proteomics. The company had a strong focus on intellectual property, engineering/technology and bioinformatics. As CEO he led the company to ASX listing in 2004. Since 2005 Keith has been involved in new business development in biotech, e-health and other emerging technologies. Keith sees climate change and sustainable development as a major issue for humankind and also a major business disruptor/risk and opportunity. Keith holds a Bachelor Agr Science from the University of Melbourne and a PhD from the Australian National University. He is a Fellow of the Australian Academy of Technological Sciences & Engineering and received an AM (Member of the Order of Australia) for services to the Biotechnology Industry. He has received various industry awards including an Innovation Hero Medal from the Warren Centre for Advanced Engineering. With 300 scientific papers and many patents written, Keith has a clear view of innovation in the Biotechnology and Climate/Renewable Energy space. He is not a financial advisor but his perspective adds relevance to decision-making concerning feasibility and investment in technology innovation.

Disclosure: I/we have a beneficial long position in the shares of CWGYF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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